Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BlackRock Inc. | d851103d8k.htm |
| EX-99.1 - EARNINGS RELEASE DATED JANUARY 15, 2015 ISSUED BY THE COMPANY - BlackRock Inc. | d851103dex991.htm |
 Q4
2014 Earnings Earnings Release Supplement:
Results
presented
on
an
“as
adjusted”
basis,
unless
otherwise
noted
January 15, 2015
Exhibit 99.2 |
 A
broadly diversified business across clients, products and geographies Q4 2014
Long-term Base Fees of $2.323 billion Long-term Assets Under
Management of $4.334 trillion at December 31, 2014 Product Type
Client Type
Style
Region
Alternatives 3%
Alternatives 8%
Multi-asset
9%
Multi-asset
13%
Fixed Income
32%
Fixed Income
24%
Equity
56%
Equity
55%
iShares
24%
iShares
36%
Retail
12%
Retail
35%
Institutional
64%
Institutional
29%
AUM
Base Fees
AUM
Base Fees
Index
42%
Index
10%
iShares
24%
iShares
36%
Asia-Pacific 8%
Asia-Pacific 8%
EMEA
31%
EMEA
28%
Americas
61%
Americas
64%
Active
34%
Active
54%
AUM
Base Fees
AUM
Base Fees
Note: Revenue and AUM by region data is based on client domicile.
1 |
 Long-term net flows ($ in billions)
Total Long-Term
Retail
iShares
Institutional
LTM organic asset growth rate (%)
2
$47
$39
$12
$25
$41
$27
$38
$29
$88
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
$4
$9
$5
$8
$17
$14
$13
$5
$23
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
$36
$26
($1)
$20
$19
$8
$30
$18
$44
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
$7
$5
$8
($3)
$5
$5
($6)
$6
$21
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
1%
2%
4%
3%
3%
4%
4%
5%
0%
3%
6%
7%
10%
10%
13%
11%
11%
5%
14%
14%
13%
11%
8%
6%
10%
9%
11%
(5%)
(3%)
(2%)
1%
1%
1%
0%
0%
1%
Note: LTM organic asset growth rate measures rolling last twelve months net new flows over beginning
period assets. |
 Profitability ($ in millions, except per share data)
Net Income and EPS, as adjusted
Operating Income and Margin, as adjusted
Operating Income
Operating Margin
•
Operating
income,
as
adjusted
up
13%
from
full
year
2013
•
Operating
margin,
as
adjusted
expanded
150
bps
from
full
year
2013
•
Net
income,
as
adjusted
up
15%
from
full
year
2013
•
EPS,
as
adjusted
up
17%
from
full
year
2013
Net Income
EPS
3
Full Year 2014
Operating Income = $4,563
Operating Margin = 42.9%
Full Year 2013
Operating Income = $4,024
Operating Margin = 41.4%
Full Year 2014
Net Income = $3,310
EPS = $19.34
Full Year 2013
Net Income = $2,882
EPS = $16.58
$1,041
$921
$982
$978
$1,143
$1,062
$1,133
$1,214
$1,154
42.6%
40.0%
41.3%
41.2%
42.7%
41.4%
42.4%
44.2%
43.6%
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
$695
$637
$722
$672
$851
$762
$837
$890
$821
$3.96
$3.65
$4.15
$3.88
$4.92
$4.43
$4.89
$5.21
$4.82
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
For further information and reconciliation between GAAP and as adjusted, see page 12 of this earnings
release supplement, notes (1) through (4) in the current earnings release as well as previously filed
Form 10-Ks, 10-Qs and 8-Ks. |
 Capital management (amounts in millions, except per share data)
Amounts above exclude repurchases of employee tax withholdings related to employee
stock transactions. GAAP Dividend Payout Ratio = Dividends declared / GAAP
net income. Total GAAP Payout Ratio = (Dividends declared + share
repurchases) / GAAP net income. Share repurchases and weighted average diluted
shares Dividends and Payout Ratios
4
Full Year 2013
Dividend = $6.72
Total GAAP Payout Ratio = 74%
Full Year 2014
Dividend = $7.72
Total GAAP Payout Ratio = 71%
$250
$250
$250
$250
$250
$250
$250
$250
$166
170.4
170.8
171.2
171.9
173.0
173.4
173.9
174.6
175.2
Q4
2014
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Q4
2012
Share Repurchases
Weighted average diluted shares
$1.50
$1.68
$1.68
$1.68
$1.68
$1.93
$1.93
$1.93
$1.93
37%
49%
39%
39%
34%
48%
40%
35%
40%
61%
88%
74%
74%
64%
81%
71%
63%
70%
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Dividends
GAAP Dividend Payout Ratio
Total GAAP Payout Ratio |
 Major
market indices and exchange rates Spot
% Change
12/31/2014 vs.
Average
% Change
Q4 2014 vs.
12/31/2013
9/30/2014
12/31/2014
12/31/2013
9/30/2014
Q4 2013
Q3 2014
Q4 2014
Q4 2013
Q3 2014
Equity Indices:
Domestic
S&P 500
1,848
1,972
2,059
11%
4%
1,770
1,976
2,011
14%
2%
Global
MSCI Barra World Index
1,661
1,698
1,710
3%
1%
1,602
1,733
1,695
6%
(2%)
MSCI Europe Index
112
117
117
4%
-%
109
116
114
5%
(2%)
MSCI AC Asia Pacific Index
141
140
138
(2%)
(1%)
141
147
139
(1%)
(5%)
MSCI Emerging Markets Index
1,003
1,005
956
(5%)
(5%)
1,011
1,067
982
(3%)
(8%)
S&P Global Natural Resources
3,503
3,438
3,147
(10%)
(8%)
3,418
3,675
3,249
(5%)
(12%)
Fixed Income Index:
Barclays U.S. Aggregate Bond Index
1,807
1,881
1,915
6%
2%
1,814
1,880
1,905
5%
1%
Foreign Exchange Rates:
GBP to USD
1.66
1.62
1.56
(6%)
(4%)
1.62
1.67
1.58
(2%)
(5%)
EUR to USD
1.38
1.26
1.21
(12%)
(4%)
1.36
1.33
1.25
(8%)
(6%)
Source: Bloomberg
5 |
 Quarterly revenue
Q4 2014 Compared to Q4 2013
$7 million
Total Revenue
Q4 2014
$2,784 million
Q4 2014 Compared to Q3 2014
($65) million
Percentage Change
Year-over-Year
Sequential
Base Fees ex. SL
5%
(3%)
Securities Lending
17
2
Performance Fees
(46)
8
9
4
5
-
Distribution Fees
(16)
(6)
Other Revenue
9
(12)
-
(2)
6
$2,777
$2,784
$99
$17
$11
$5
$2
($3)
($124)
$2,849
$2,784
$11
$5
$2
($1)
($8)
($74)
Q3 2014
Performance
Fees
Aladdin
Securities
Lending
Distribution
fees
Other
Revenue
Base Fees ex
Sec Lending
Q4 2014
Q4 2013
Aladdin
Securities
Lending
Distribution
fees
Other
Revenue
Q4 2014
Base Fees ex
Sec Lending
Performance
Fees
Other
BRS
Base Fees ex. Securities Lending
Securities Lending
Performance Fees
Aladdin
Other BRS
81%
4%
5%
5%
2%
1%
2%
Aladdin
Other BRS
Total
Distribution Fees
Other Revenue |
 Quarterly investment advisory, administration fees and securities lending
revenue Q4 2014: $2,396 million
Q4 2014 Compared to Q4 2013
Investment advisory, administration fees and securities lending revenue
$116 million
Q4 2014 Compared to Q3 2014
($72) million
Q4 2013: $2,280 million
Q3 2014: $2,468 million
7
20%
29%
14%
5%
12%
8%
6%
3%
3%
$2,468
$2,396
$8
$3
$1
($1)
($2)
($12)
($22)
($47)
Q3 2014
Active FI
iShares FI
Cash
Non-ETF FI
Alts
Multi
-Asset
iShares
EQ
Active EQ
Q4 2014
$2,280
$2,396
$46
$40
$27
$20
$11
$6
($4)
($7)
($23)
Q4 2013
Active FI
iShares
EQ
Multi-
Asset
Non-ETF iShares Non-ETF
Index EQ
FI
Index FI
Cash
Alts
Active
EQ
Q4 2014
29%
15%
5%
13%
7%
7%
3%
3%
Active Equity
iShares Equity
Active Fixed Income
iShares Fixed Income
Multi
-
Asset
Alternatives
Non-ETF
Index
Equity
Non-ETF Index Fixed Income
Cash
17%
29%
15%
5%
13%
8%
7%
3%
3% |
 Quarterly expense
Q4 2014
$1,630 million
Expense, as adjusted, by Category
Q4 2014 Compared to Q4 2013, as adjusted
For further information and reconciliation between GAAP and as adjusted, see page 12
of this earnings release supplement and notes (1) through (4) in the current earnings release.
($4) million
Q4 2014 Compared to Q3 2014, as adjusted
($5) million
Percentage Change
Year-over-Year
Sequential
Employee Comp. & Benefits
-%
(5%)
Distribution & Servicing Costs
10
7
Amort. of Deferred Sales Commissions
(7)
(7)
Direct Fund Expense
10
(8)
General & Administrative
(6)
19
Amortization of Intangibles
(15)
(13)
Total
-
-
8
$1,634
$1,630
$16
$9
$1
($1)
($6)
($23)
Q4 2013
Direct Fund
Distribution
& Servicing
Comp &
Benefits
Amort
-
Def
Comp
Amort -
Intang
assets
G&A
Q4 2014
$1,635
$1,630
$61
$6
($1)
($5)
($16)
($50)
Q3 2014
G&A
Distribution
& Servicing
Amort
-
Def
Comp
Amort-
Intang
assets
Direct Fund
Expense
Comp &
Benefits
Q4 2014
56%
6%
1%
11%
24%
2%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales
Commissions
Direct Fund Expense
General & Administration
Amortization of Intangibles |
 Full
year revenue 2014 Compared to 2013
$901 million
Total Revenue
Percentage Change
Year-over-Year
Base Fees ex. SL
10%
Securities Lending
7
Performance Fees
(2)
9
12
Distribution Fees
(4)
3
9
9
Base Fees ex. Securities Lending
Securities Lending
Performance Fees
Aladdin
Other BRS
Distribution Fees
Other Revenue
$10,180
$11,081
$820
$41
$30
$17
$7
($3)
($11)
2013
Base Fees ex
Sec Lending
Aladdin
Securities
Lending
Other BRS
Other
Revenue
Distribution
fees
Performance
Fees
2014
83%
4%
5%
4%
1%
1%
2%
Aladdin
Other BRS
Total
Other Revenue
Full year 2014
$11,081 million |
 Full
year investment advisory, administration fees and securities lending revenue
Full year 2014: $9,589 million
2014 Compared to 2013
Investment advisory, administration fees and securities lending revenue
$850 million
Full year 2013: $8,739 million
19%
27%
15%
5%
12%
8%
7%
3%
4%
Active Equity
iShares Equity
Active Fixed Income
iShares Fixed Income
Multi-Asset
Alternatives
Non-ETF Index Equity
Non-ETF Index Fixed Income
Cash
$8,739
$9,589
$315
$165
$127
$103
$83
$44
$22
$20
($29)
2013
iShares
EQ
Multi-
Asset
Active FI
Active
EQ
Index EQ
Non-ETF
Alts
Non-ETF
Index FI
iShares FI
Cash
2014
18%
28%
15%
5%
13%
8%
7%
3%
3%
10 |
 Full
year expense Full year 2014
$6,518 million
Expense, as adjusted, by Category
2014 Compared to 2013, as adjusted
For further information and reconciliation between GAAP and as adjusted, see page 12
of this earnings release supplement and notes (1) through (4) in the current earnings release.
$362 million
Percentage Change
Year-over-Year
Employee Comp. & Benefits
8%
Distribution & Servicing Costs
3
Amort. of Deferred Sales Commissions
8
Direct Fund Expense
14
General & Administrative
(1)
Amortization of Intangibles
(2)
Total
6
11
$6,156
$6,518
$273
$91
$11
$4
($4)
($13)
2013
Comp & Benefits
Direct Fund
Distribution &
Servicing
Amort -
Def
Comp
Amort -
Intang
Assets
G&A
2014
58%
6%
1%
11%
22%
2%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales
Commissions
Direct Fund Expense
General & Administration
Amortization of Intangibles |
 Reconciliation between GAAP and as adjusted ($ in millions)
Non-GAAP adjustments include amounts related to the reduction of an
indemnification asset, the PennyMac Charitable Contribution, U.K. lease exit costs, a contribution to short-term investment funds (“STIFs”),
PNC LTIP funding obligation, compensation related to appreciation (depreciation) on
certain deferred compensation plans and noncash income tax matters, as applicable.
For further information and reconciliation between GAAP and as adjusted, see notes
(1) through (4) in the current earnings release as well as previously filed Form 10-Ks, 10-Qs and 8-Ks.
12
2012
2013
2014
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Operating Income
GAAP
$1,005
$909
$849
$966
$1,133
$1,051
$1,122
$1,157
$1,144
Non-GAAP adjustments
36
12
133
12
10
11
11
57
10
As Adjusted
$1,041
$921
$982
$978
$1,143
$1,062
$1,133
$1,214
$1,154
Nonoperating Income
(Expense)
GAAP
($67)
$41
$69
($18)
$24
$17
$16
($52)
($60)
Non-GAAP adjustments
40
(38)
(57)
(3)
(11)
9
(36)
44
6
As Adjusted
($27)
$3
$12
($21)
$13
$26
($20)
($8)
($54)
Net
Income
GAAP
$690
$632
$729
$730
$841
$756
$808
$917
$813
Non-GAAP adjustments
5
5
(7)
(58)
10
6
29
(27)
8
As Adjusted
$695
$637
$722
$672
$851
$762
$837
$890
$821 |
 Important Notes
13
This presentation, and other statements that BlackRock, Inc. (“BlackRock”) may make, may
contain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act, with respect to BlackRock’s future financial or business performance, strategies or
expectations. Forward-looking statements are typically identified by words or phrases such
as “trend,” “potential,” “opportunity,” “pipeline,”
“believe,” “comfortable,” “expect,” “anticipate,”
“current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,”
“sustain,” “seek,” “achieve,” and similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar
expressions.
BlackRock cautions that forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time. Forward-looking
statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially from those anticipated in
forward-looking statements and future results could differ materially from historical
performance.
In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange
Commission reports and those identified elsewhere in this presentation, the following factors,
among others, could cause actual results to differ materially from forward-looking statements or historical
performance: (1) the introduction, withdrawal, success and timing of business initiatives and
strategies; (2) changes and volatility in political, economic or industry conditions, the
interest rate environment, foreign exchange rates or financial and capital markets, which could result in
changes in demand for products or services or in the value of assets under management; (3) the
relative and absolute investment performance of BlackRock’s investment products; (4) the
impact of increased competition; (5) the impact of future acquisitions or divestitures; (6) the unfavorable
resolution of legal proceedings; (7) the extent and timing of any share repurchases; (8) the impact,
extent and timing of technological changes and the adequacy of intellectual property,
information and cyber security protection; (9) the impact of legislative and regulatory actions and reforms,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory,
supervisory or enforcement actions of government agencies relating to BlackRock or The PNC
Financial Services Group, Inc.; (10) terrorist activities, international hostilities and natural disasters,
which may adversely affect the general economy, domestic and local financial and capital markets,
specific industries or BlackRock; (11) the ability to attract and retain highly talented
professionals; (12) fluctuations in the carrying value of BlackRock’s economic investments; (13) the
impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on
products or transactions, which could affect the value proposition to clients and, generally,
the tax position of BlackRock; (14) BlackRock’s success in maintaining the distribution of its
products; (15) the impact of BlackRock electing to provide support to its products from time to time
and any potential liabilities related to securities lending or other indemnification
obligations; and (16) the impact of problems at other financial institutions or the failure or negative performance of
products at other financial institutions.
This presentation also includes non-GAAP financial measures. You can find
our presentations on the most directly comparable GAAP financial measures
calculated in accordance with GAAP and our reconciliations on page 12 of this earnings release supplement, our current earnings
release
dated
January
15,
2015,
and
BlackRock’s
other
periodic
reports,
which
are
available
on
BlackRock’s
web
site
at
www.blackrock.com. |